Adani group shares plunge by up to 9 % on reports of more pledging

Shares of Adani Group companies on Monday fell by up to 9 per cent in intra-day trade following reports that three companies in the group have pledged additional shares to SBICAP Trustee Company, a company in the State Bank of India group.

Adani group shares plunge by up to 9 % on reports of more pledging
Adani group shares plunge by up to 9 % on reports of more pledging

Shares of Adani Total Gas, Adani Power, Adani Transmission, Adani Green Energy, NDTV and Adani Wilmar fell by 5 per cent each. Adani Enterprises plummeted by 8.95 per cent, Adani Port by 6.69 per cent and Ambuja Cement by 6.27 per cent as of 12.45 IST.

According to filings, as many as 75 lakh more shares of Adani Ports have been pledged, taking the total to 1 per cent of all shares with SBICAP. In the case of Adani Green, pledge of 60 lakh more shares took the total to 1.06 per cent. Pledge of 13 lakh more shares of Adani Transmission took the total to 0.55 per cent.

SBICAP Trustee officials said the additional pledge is top-up of the existing collateral and no fresh loan was issued. SBICAP Trustee is a subsidiary of SBI Capital Markets which in turn is a subsidiary of SBI.

According to Swaminathan J, MD

According to Swaminathan J, MD, SBI, as part of the Standby LC facility of USD 300 million provided by SBI for Adani group’s Carmichael project in Australia, there is an additional collateral by way of pledge of shares of 3 group companies. The required collateral coverage of 140 per cent is reviewed at the end of each month and any shortfall on account of MTM is required to be topped up. There has been a top up each in the months of June and July 2022 and the third such top up was done on February 8, 2023 after a review as on January 31, 2023, he said.

Being the security trustee, SBI Cap Trustee Company is required to file the same with SEBI and it is being complied with by them each time whenever there is a change in number of shares pledged, SBI said. With this latest tranche, the percentage of shares that is pledged towards this project, aggregates to 1.06 per cent, 1.00 per cent and 0.55 per cent of equity shares of Adani Green, Adani Ports and Adani Transmission, respectively, Swaminathan said.

“It is clarified that such a share pledge is only as additional collateral security over and above the project assets and no additional finance is extended by SBI against such shares pledged,” SBI said.

“The additional pledge is made by the company to remain compliant to the covenant prescribed for an existing loan which is part of the loans already covered in the total outstanding exposure of the bank,” SBI said.

the Adani Group prepaid $1.114 billion

Last week, the promoters of the Adani Group prepaid $1.114 billion (around Rs 9,215 crore) to lenders (banks and finance) companies to release pledged shares in Adani Ports & Special Economic Zone Ltd, Adani Green Energy Ltd and Adani Transmission Ltd.

READ MORE : Adani Enterprises faces risk of Rs 11,574 crore unsecured loan recall by banks

Global index provider MSCI, owned by US-based banking group Morgan Stanley, last week reduced its weightage for four Adani Group stocks in its various widely tracked indexes after reviewing the shares in the free float category, or shares which can be freely traded without any restrictions.

On the other hand, Moody’s Investors Service on Friday revised the outlook on four Adani Group companies to negative from stable, while reaffirming their ratings.

Shares of Adani group companies

Shares of Adani group companies came under heavy selling pressure on the stock exchanges since January 24, 2023 after a report from New York-based Hindenburg Research alleged “brazen stock manipulation and accounting fraud scheme” over the course of decades by the group.

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